Microsoft All Set to Acquire SwiftKey

As tech bloggers know all too well, Microsoft has been on a buying binge lately. They regularly acquire many companies and incorporate the features into existing Microsoft products and services.  But we’re not sure what Microsoft will do with this acquisition.

“There’s a war for talent in artificial intelligence — and companies like Google and Microsoft recognize the best talent is in the UK,” says a source close to the deal.

Microsoft is all set to acquire SwiftKey, a UK-based startup that created the world’s most beautiful and efficient predictive Android and iOS keyboard for smartphones. What set SwiftKey apart from other keyboards is the fact that it uses artificial intelligence and machine learning to predict what word a user is going to type next. I’m not going to lie, I use it myself as my default keyboard app.

“Everyone’s had embarrassing autocorrect moments,” said Ben Medlock, co-founder and CTO of SwiftKey, “That’s why we built SwiftKey to understand the context of words, not just their spelling. It works from the word go to adjust to you — from the phrases you write to how you touch the screen. It means you don’t have to worry about typing, it does all the hard work for you.”

The deal is to be around $250 million. Investors report the deal will be cash only, and will probably be announced on Wednesday, February 03, 2016. SwiftKey was created by Ben Medlock and Jon Reynolds in 2008. After receiving a funding amount of $21.59m from Accel Partners, Octopus Investments, Index Ventures and angel investor-cum-celebrity Stephen Fry, SwiftKey started to sell the app for $4 per install.

Just a few years ago, SwiftKey became a very popular app and rose to the top of all app stores in the market. However, the company did not find a reliable and sustainable business model. They made the app free and started to offer add-on themes and personalization features through in-app purchases. Samsung and Blackberry pre-installed SwiftKey on their phones before launch, adding to the company’s much-needed revenue. Even Stephen Hawking uses SwiftKey as his means of communication.

"Everything skyrocketed (after funding). We had 100,000 downloads in the first week. It was an incredible experience for us - we now have millions of active users and SwiftKey has become one of the best-selling apps of all time," Medlock said.  

Even though the duo are the owners of the company, they hold a minor stake in the company following the funding rounds. This clearly shows the mindset of the new-age CEO – the ability to forfeit their stake in the company to allow the company to grow through funding.

Both Microsoft and SwiftKey declined to comment on the deal. Recently, Microsoft had acquired Metanautix, an A.I. company.